TARP and Stress Tests: Now Can Banks Return the Money?

James Gattuso / May 07, 2009

The results aren’t officially out yet, but it looks like 14 of the 19 financial firms subjected to “stress tests” by the Treasury Department passed their exams with flying colors. Now, the question is will they be allowed to return the money they borrowed from taxpayers?

Many of them want to. But Treasury Secretary Timothy Geithner has been dragging his feet on the issue indicating that repayment might not be allowed for even healthy banks if the government doesn’t think that general economic conditions are favorable.

That policy drew a firestorm of criticism. Here were firms wanting to pay back taxpayers, and they were being told they couldn’t? It looked especially tenuous as news got out that Chrysler would not be paying back its loans at all. A poll this week by National Media found 86 percent of Americans favor letting companies repay. (more…)